Episode 28 – Stem Cell Politics

Glenn and Jeff dive right into the political minefield in Episode 28, revealing what’s really going on with the reversal of the Bush Stem Cell research ban, and the Congressional appropriations package. Jeff offers support for the budget bill, and they both call for more transparency in the process. Glenn offers a simple plan to get that transparency (maybe they’ll hire him to do it). They also discuss the role of journalism and podcasts, and why The Daily Show’s Jon Stewart might just be the best journalist in the business. In a bombshell, Jeff reveals which Senate Democrat is most vulnerable in 2010, how to beat that person, and that that person needs to do to win. PoliTalk: entertaining, informative and refreshingly honest.

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3 responses to “Episode 28 – Stem Cell Politics”

Guys – more of a general comment and maybe a topic for a show. People are now talking about the new “populism” due to the outrage that executives are taking taxpayers dollars to keep their companies from going under, then giving it in bonuses to folks who might not have jobs had they not had our money. While I completely agree with Obama trying to take back this money, it misses the point a little.

It’s not “populism” its just ethical, its right, it offends the sensibilities that there are people who think they deserve a bonus when their company is only in business due to taxpayer dollars.

The other thing that bugs me when I look at the mainstream press is that no-one is talking about the role we all played in this collapse. Had Americans not been complacent and irresponsible about their finances, gone into debt to feel like they made more money, and bought homes that they could not afford, then this crisis does not happen. The greed that is talked about was fed by our appetite to overspend.

Lets not let a false “populism” lead us down the path to a more socialist society. Scrap the class war, and lets declare war on a lack of financial discipline on main street.

Instead of the Geithner plan that would reward vulture investors and pay little to banks for their valuable impacted debt assets, why not in the case of any major financial institution (a bank, for example), provide a U.S. full faith and credit guarantee of its impacted debt assets. That guarantee is authorized by TARP Section 102.

In exchange, the bank would agree that the interest rate on the guaranteed debt would drop to an amount of interest that would enable the bank to sell the debt in the open market at, say, 75% of its face value or keep the debt on its books at that value. A bank’s agreement to an interest rate of, say 2.6%, will produce that value in the case of debt guaranteed by the full faith and credit of the U.S. Similarly, to make the program work, the bank would agree to the periodic principal payments going 75% to the creditor bank and the remaining 25% to the U.S.

In that way, the credit crunch is ended. The bank’s impacted debt has been valued. The assets of the bank are sound. Others would be confident lending to the bank and the bank can resume lending. No other program that would do this has been initiated.

The debtor (a subprime mortgage holder, for example) will also have its interest rate drop. Not to 2.6%, but to, say, 5%.

This program would generate $300 Billion to the US Treasury over an 8 year period (assumed actual duration of the mortgage) from the differential between (a) the 5% paid by the debtor and the 2.6% paid to the creditors; (b) the 100% of each principal payment received and the 75% paid to the creditors; and, (c) from the interest that would otherwise be paid by the U.S. if the program of cash payments under TARP Section 101 were continued instead of using the guarantee program under TARP Section 102. These funds pay for costs of program, including any defaults and possible needed subsidies to homeowners to help pay their mortgages.

Instead of the Geithner plan that would reward vulture investors and pay little to banks for their valuable impacted debt assets, why not in the case of any major financial institution (a bank, for example), provide a U.S. full faith and credit guarantee of its impacted debt assets. That guarantee is authorized by TARP Section 102.

In exchange, the bank would agree that the interest rate on the guaranteed debt would drop to an amount of interest that would enable the bank to sell the debt in the open market at, say, 75% of its face value or keep the debt on its books at that value. A bank’s agreement to an interest rate of, say 2.6%, will produce that value in the case of debt guaranteed by the full faith and credit of the U.S. Similarly, to make the program work, the bank would agree to the periodic principal payments going 75% to the creditor bank and the remaining 25% to the U.S.

In that way, the credit crunch is ended. The bank’s impacted debt has been valued. The assets of the bank are sound. Others would be confident lending to the bank and the bank can resume lending. No other program that would do this has been initiated.

The debtor (a subprime mortgage holder, for example) will also have its interest rate drop. Not to 2.6%, but to, say, 5%.

This program would generate $300 Billion to the US Treasury over an 8 year period (assumed actual duration of the mortgage) from the differential between (a) the 5% paid by the debtor and the 2.6% paid to the creditors; (b) the 100% of each principal payment received and the 75% paid to the creditors; and, (c) from the interest that would otherwise be paid by the U.S. if the program of cash payments under TARP Section 101 were continued instead of using the guarantee program under TARP Section 102. These funds pay for costs of program, including any defaults and possible needed subsidies to homeowners to help pay their mortgages.